This high-flying biotech stock is moving even higher — and for good reason.
Shares of Summit Therapeutics (SMMT 23.13%) were soaring 22.5% higher as of 11:18 a.m. ET on Thursday. The gain came after the clinical-stage biopharmaceutical company revealed that it entered into agreements with several biotech institutional and individual accredited investors for the sale of over 10.3 million shares for roughly $235 million in a private placement.
Investors were undoubtedly especially glad to see key insiders agree to buy more Summit Therapeutics stock. Together, co-CEOs Robert W. Duggan and Mahkam Zanganeh, chief operating officer (COO)/CFO Manmeet Soni, chief accounting officer Bhaskar Anand, and board member Jeff Huber are purchasing over 3.48 million shares.
What’s behind Summit’s sizzling momentum?
Summit’s latest gain came on top of the stock’s 85% jump earlier this week. This sizzling momentum is due to the company’s overwhelmingly positive results reported on Sept. 8, 2024, from a phase 3 study evaluating ivonescimab as a first-line treatment for advanced non-small cell lung cancer.
In this clinical study, which was conducted in China, ivonescimab reduced the risk of disease progression or death by 49% compared to Merck‘s blockbuster drug Keytruda. Summit’s experimental cancer therapy is the first to beat Keytruda head-to-head in a randomized late-stage clinical trial.
Is Summit Therapeutics stock a buy?
Even with the stellar phase 3 results for ivonescimab, buying a clinical-stage biotech stock is always associated with risks. There are also tremendous expectations for Summit, as reflected by the company’s market cap of nearly $19 billion despite having no product on the market. That said, the commercial potential for ivonescimab appears to be huge. I think this stock is one to consider for aggressive investors.
Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck and Summit Therapeutics. The Motley Fool has a disclosure policy.
